Survey of Emerging Market Conditions

Most Recent Quarterly Report

Executive Summary & Conclusions

Florida’s real estate practitioners remain optimistic about the state’s real estate markets. UF’s Commercial Real Estate Sentiment Index, an outlook of our respondents’ own businesses, improved to its highest level since the fourth quarter of 2006.

Their optimism continues to be driven by the improving Florida economy and the improving job market. The overall Florida unemployment rate declined slightly to 6.2% this quarter with overall Florida employment reaching 7.8 million jobs. The overall employment represents an increase of almost 240,000 new jobs from the same period last year. Additionally, those new jobs are spread across a number of the employment sectors with Trade, Transportation and Utilities; Professional and Business Services; Construction; and Leisure and Hospitality leading the way. The increase in employment for hospitality is being driven by record tourism. According to Visit Florida, the state continues to see record setting levels of tourism with total visitation up 3% from the 2nd quarter of 2013 at 24.0 million visitors. Florida continues to see growth in overseas visitation, which is up 4% over a record setting 2013.

The continued improvement in the job market along with tremendous growth in the tourism industry has been positive for consumer confidence. The UF Bureau of Economic and Business Research (BEBR) consumer sentiment index remained at post-recession highs this quarter at 82.

However, uncertainty continues to play a part in tempering that improvement. The uncertainty created by government policy and inaction continues to prevent companies from moving forward aggressively with expansion.

Our respondents continue to be concerned about the impact and timing of the Fed’s forthcoming increases in interest rates. However, despite that concern, the rate on the 10 year treasury remains low and declined 20 basis points from the end of the first quarter. A measured increase by the Federal Reserve would allow real estate markets to absorb the increases through compression of the historically high spreads between cap rates and the 10 year yield. Additionally, the increased interest rates may be offset by improving rents and net operating incomes.

Despite the uncertainties, Florida’s economy and therefore the real estate markets continue to improve and that trend should continue.

  • The UF Commercial Real Estate Sentiment Index increased this quarter to its highest level since the 4th quarter of 2006.
  • The outlook for occupancy and rents remained positive across most property types with expectations that they will increase.
  • Cap rates remained stable or declined slightly across most property types. However, with increasing interest rates, expectations are for a rise in cap rates over the next year.
  • Yields have remained relatively stable across most property types. As with cap rates, rising interest rates are pushing expectations for higher yields across property types.
  • The outlook for investment remained positive across all property types.
  • Respondents’ outlook for capital availability remained stable this quarter with most expecting it to increase in the future.

Results by Florida Market

Northwest Northwest Jacksonville North-Central East-Central Coast Orlando Lakeland-Winter Haven Tampa-St. Petersburg Sarasota-Bradenton Treasure Coast Palm Beach County Broward County Dade County Southwest Coast

Past Quarterly Reports:

About the Survey

The Survey of Emerging Market Conditions targets the experienced leadership and professionals of Florida's real estate development and investment community to gain insights and market intelligence on matters of fundamental importance to real estate practitioners and policy-makers across Florida.


The Survey of Emerging Market Conditions is the only Florida-centered survey of leaders and professional advisors in the real estate industry. It analyzes prospective data to produce extensive forecasting information pertinent to 37 of the state's 67 counties. The survey is administered by the Bergstrom Center for Real Estate Studies at the University of Florida.

With the highly fragmented nature of real estate, no survey can encompass all aspects of the real estate industry. To face this challenge, the Survey of Emerging Market Conditions employs a quarterly sounding from multiple groups of market leaders and professional groups advising them.


It is important to understand the unique strengths and limitations of the Survey of Emerging Market Conditions.

Like virtually all surveys of investment real estate markets, this survey gathers opinion. Thus, it distills complex judgments, and amounts to a carefully controlled and structured conversation with truly qualified real estate experts. The survey asks questions carefully designed to avoid ambiguities, a major problem in collecting complex information.

The survey screens respondents at two levels of refinement to assure truly expert opinions. First, only persons with established real estate credentials are invited to participate. Second, each respondent is asked to respond only for those localities and property types where he or she is an active expert.

The result is that all the data collected can be regarded as authoritative, no matter how small the sample of responses for a property type-locality "cell." (We maintain a minimum of at least four respondents for any market cell to guard against response mistakes.) In short, even data from the least actively covered markets that we report have value as an additional expert opinion. In the more actively reported market cells, our data represent an extraordinary consensus of the experts.

Survey results are anecdotal findings about required returns and investment objectives of owners and investors contemplating acquisitions or deciding about the timing of dispositions. Therefore the survey is a measure of current and prospective market perceptions, including the confidence levels exhibited by leading real estate professionals and market participants. In other words, the Survey of Emerging Market Conditions is a report of anticipated returns, business outlook and other forecasting views, rather than an analysis of actual or historical performance. The most valuable benefit for many may be interpretation of survey results over time to better comprehend market trends and shifts.

Glossary of Survey Terms

Cap Rates: Capitalization rates are the ratio of expected net operating income to actual transaction price. It is regarded as important that cap rates be based on actual transaction price rather than an appraised value.

Yield: For the Survey of Emerging Market Conditions, yield is before income taxes (pre-tax), and without debt financing (unlevered). It is the rate of interest that discounts all future property cash flows back to a present value equal to the original equity investment (acquisition cost).

Absorption Rates: Refers to the number of additional units of housing, office space, etc. that can be sold or leased in a given market area over a given period of time. For the purposes of the Survey of Emerging Market Conditions, the exact time interval, market area and measure of units are not of concern. Respondents are asked only to comment on the direction of change in the absorption rate.

Occupancy Rate: Two notions of occupancy rate are the percentage of a building's leasable space that is occupied and the percentage of a building's leasable space that is under lease. (Note that some leased space may not be occupied.) For the purposes of the Survey of Emerging Market Conditions either notion is acceptable since we are asking about direction of change in occupancy rather than levels of occupancy.

Rental Rate: The meaning of rental rate is extremely complex. In residential, it can include furnishings and utilities, or it can be net of all furnishings and utilities. With commercial property it can range from full gross rent, including janitorial services to "triple net," which excludes all operating expenses. Fortunately, for the Survey of Emerging Market Conditions this variation is a minimal issue. The survey asks respondents only about the qualitative direction of change in rental rates, however defined. Generally, the direction of change will not depend on the definition of rent.

Property Types

Property: A property is an individual asset that may include one or a collection of buildings (e.g., a business park or apartment complex). Parks, complexes, and neighboring buildings are considered one property.

The Survey of Emerging Market Conditions covers five broad property types: residential (single family, condominium and apartments), office, flex/industrial, retail and hospitality. Each property type is further divided into two or more sub-types.

  • Industrial: Primarily for industrial use, such as distribution, manufacturing or warehouse facilities. Flex refers to properties with a mix of office and industrial uses. Usually a single story, Flex space may be research facilities, technology/telecom facilities, or similar uses.
  • Office: Primarily used for office space. Office properties may have a small retail component (especially in CBDs on the street level), or a parking garage, or other attached uses.
  • Apartments: Includes all rental residential properties with more than four units.
  • Single Family: Includes single family detached, individually owned residences in structures with up to four units, and individually owned townhouses.
  • Condominiums: For the Survey of Emerging Market Conditions, includes all individually owned residences in structures with more than four units, and with facilities owned in common. Note that this excludes many townhouses.
  • Retail: The Survey of Emerging Market Conditions utilizes the ICSC's definitions of retail assets as either shopping centers (strip or enclosed malls) or free-standing stores.
  • Condo Conversion: Property that was purchased with intent of converting individual units to condominium ownership.

Major Florida Markets

The Survey of Emerging Market Conditions aggregates 37 of Florida's 67 counties into the top 13 Florida markets. Counties comprising each major Florida market as follows:

  • Miami-Dade County
  • Broward County
  • Palm Beach County
  • Treasure Coast (Indian River, Martin & St. Lucie Counties)
  • Southwest Coast - Southwest Florida area (Charlotte, Lee & Collier Counties)
  • East Central Coast - Daytona Beach, Melbourne-Titusville-Palm Bay (Volusia & Brevard Counties)
  • Orlando - Central Florida area (Seminole, Osceola, Lake & Orange Counties)
  • Lakeland-Winter Haven (Polk County)
  • Tampa-St. Petersburg - Tampa Bay area (Hillsborough, Pasco, Hernando & Pinellas Counties)
  • Sarasota-Bradenton (Manatee & Sarasota Counties)
  • Jacksonville - Jacksonville (Duval, Nassau, St. Johns, Baker & Clay Counties)
  • North Central (Alachua, Marion & Gilchrist Counties)
  • Northwest Florida - Pensacola, Ft. Walton Beach, Panama City, Tallahassee (Escambia, Santa Rosa, Okaloosa, Walton, Bay, Leon & Gadsden Counties)

Production Staff

Lead Researcher and Analyst:
Dr. Wayne R. Archer, Director
University of Florida Bergstrom Center for Real Estate Studies
Professor of Real Estate and Wachovia Fellow,
Warrington College of Business Administration

Survey Research Analyst & Designer:
Scott Richards, M.A., Research Analyst,
UF Bureau of Economic & Business Research

Survey Website Design & Support:
ITSP Web, Data & Communication Services,
Warrington College of Business Administration

Graduate Student Production Assistants:
Ben Scheick, PhD student
Patrick Boileau, MSRE Class of 2007
Dan Carlson, MSRE Class of 2007

Participating Organizations


College Info

Warrington College of Business Administration
100 BRY
PO Box 117150
Gainesville, FL 32611-7150
Phone: 352.392.2397
Fax: 352.392.2086

for Alumni & Friends


for Faculty & Staff

for Students

Join the Conversation
  • Facebook
  • Twitter
  • LinkedIn
  • YouTube
  • Pinterest
  • Instagram
  • EverTrue
Share Tweet Email Link +